The phrase "too good to be true" is especially relevant in construction. It reminds me of an incident involving my family's plastering company in the late 1980s. I was a young estimator when my father came back from a meeting with a major home developer, excited to share some news. The developer would pay each Friday for invoices submitted on Wednesday. My father was pleased we no longer needed to front the costs, though it seemed almost too good to be true.

Developing Problems

I thought about it all night and confronted him the next morning. I asked, “What would keep some of our guys, especially foremen, from seeing this as an opportunity to become contractors themselves?” They could lease equipment and start running big projects before you knew it. I must have struck a nerve because my father looked puzzled, then quickly recomposed himself and said, “That would never happen.” He had no answer for my next question: “Why not?”

It turns out that’s exactly what happened—and worse. The developer began treating us more like employees than subcontractors, using the threat of withholding Friday payments to keep us in line. While our company had enough capital to resist that pressure, our supervisors didn’t. Tempted by promises of independence, several became contractors. Unfortunately, the very people who should have stayed foremen—skilled in their craft but inexperienced in business—were the first to take the bait. They didn’t understand taxes, overhead, or the realities of cash flow. The developer’s tactic worked wonders on them.

Desperate Times

When a subcontractor gets into financial trouble, desperation sets in. Recently, I hired one who gave me a price that seemed too good to be true—a red flag I ignored. I rationalized that he just needed to keep his crew busy. He started strong, but soon shifted his workers to another job. Then came requests for material payments upfront—more red flags. Weeks passed with little progress, and I realized he was in deep trouble, maybe even facing bankruptcy.

As problems mounted, I offered to help by paying workers and expenses directly. He resisted, clearly preferring lump-sum paydays. Eventually, he stopped showing up. I stepped in, managed the crews, and paid them myself—learning he already owed them wages.

The lesson is clear: being a subcontractor requires discipline, patience, and financial prudence. Start small, run a tight ship, and save where possible without compromising quality. Growth should be steady, not reckless. Yes, some subcontractors scale rapidly with investors or unique opportunities, but those cases are rare. If a deal seems too generous, ask yourself: is it because you have extraordinary talent—or because someone is setting you up for a fall?